Innovation Takes Flight at American

American Airlines : Interview Transcript

INNOVATION TAKES FLIGHT

Technology is at the heart of everything we do. It's in the middle of any product that we have to offer, any new service that we have to offer, any cost reduction initiative, any revenue generation initiative that we implement. Technology is the bedrock or the baseline for that product.

The primary way that we identify new opportunities really starts with getting information from our employees, about where the technology should be, what the problem is that needs to be solved, and in most cases, how to go about implementing it.

We have, starting at the executive level—with the heads of our unions and the top executives in the company—developed successive joint leadership teams down through the organization that allow us to hear and understand what employees are doing, thinking, what the problems are, and how to go about solving them.

It's been revolutionary in terms of our ability to work successfully and reduce costs, and even enhance revenue at our company.

FOSTERING THE RIGHT ENVIRONMENT

We really believe that innovation occurs in an environment where it is allowed to flourish. And if you're not making enough mistakes and if you don't have enough failures, you're not trying enough things. And in order to do that you have to take the leash off and take the handcuffs off employees that inevitably will be the ones that lead you through the problems that you have as a company.

And we've found that moving people around and giving people different opportunities within our own company sustains and satisfies a lot of their needs and growth opportunities and needs that people have.

In an open environment like that, you'll get innovation. If it's an environment where you value what people do every day, in a diversity of the workforce in all forms—thought, gender, ethnicity, all of those things—that openness where people look around and see new things and different ideas creates an environment where people come to be innovative. And it's been very successful for us.

THE DEEP DIVE PROCESS

The deep dive process that we go through in the technology area at American Airlines is really designed to fully understand how projects work, what the value of those projects are and to keep a close tab on how they're implemented.

It also gives me, and, consequently, the rest of my management team, a look at the people that are managing the projects in a way that we would not necessarily get to see them. And also gauge the talent in the organization for purposes of movement within the organization, new opportunities and just see how well they do in an environment where they have to answer the questions and be held accountable.

INSOURCING

It was the employees that got together at an off-site, and they came up with the idea together. And what they saw was an opportunity at a time in the history of our industry when many companies are outsourcing labor and outsourcing maintenance work across the globe, to bring maintenance into our company and provide that service for other companies if we're effective and efficient enough.

So they set a goal of five hundred million dollars to bring into the company as a source of revenue. So in order to do that, we need baseline technologies that allow us to be as efficient as possible.

THE COMMUNICATIONS FRONTIER

There are several technologies on the forefront of our thinking that we think will provide value to our customers and our employees in the long run. Many of those technologies center around communications.

If you looked at how people work and communicate today, flight really disrupts a lot of people, especially the business traveler. And we're in the business of making that journey better.

Voice over IP is crucial to what we have to do in providing a better journey for people in flight. And so we're going to use technology to sort of bridge that gap, as time goes on. And we think we've got some really good ideas.

INNOVATION EXAMPLE: MOBILE TECHNOLOGY

We're trying to pioneer a number of initiatives in the area of mobile technology, many of which are associated with our customers, some of which are not. One mobile technology that's worth speaking to is our ruggedized laptops that we use for our mechanics and maintenance people.

It was initiated, organized and implemented by the mechanics on the line, out in the airports themselves.

We initially designed this to allow the mechanics not to have to leave the airplane to solve some problems, and communicate with our maintenance base in Tulsa and our systems that have maintenance information on them. Saving time, getting planes off the gate on time, solving problems faster, making customers happier.

And we're leading the industry in that regard; nobody else is doing it. I'll bet you there'll be a lot of people who try to follow.